Directive 065: Resources Applications for Oil and Gas Reservoirs ...

1.4 Application for a Common Processor Order
1.4.1 Background
The Oil and Gas Conservation Act (OGCA) affords each owner the opportunity of obtaining
its share of the production of oil or gas from any pool and provides for economic, orderly,
and efficient development in the public interest. Accordingly, the ERCB may issue a
declaration of a common processor of gas under Section 53 of the OGCA.
1.4.2 When to Make This Application
A typical situation that would warrant the filing of a common processor application with the
ERCB would be when an owner of a capable well has a market for its gas requiring
processing to meet contract specifications. The owner believes that using the existing plant is
the only economically feasible or most practical way to process the gas in question or is
clearly superior environmentally, but the owner has been unsuccessful in negotiations to gain
access to the plant on reasonable terms. The owner has recourse to apply for the declaration
of a common processor in order to gain access to the plant and allow it to obtain its share of
gas from the pool.
1.4.3 Terms of Application
An order under this section obliges each common processor, among other things, to process
gas that may be made available for processing in the plant without discrimination in favour of
one producer or owner as against another in the pool.
Under Section 56 of the OGCA, an applicant filing a common processor application has the
option of requesting that the common processor order be effective retroactively to the date of
the application. The ERCB considers such a request in light of the particular situation and has
the discretion to grant the request, deny it, or provide some measure of retroactivity other
than that requested.
In order to give effect to a common processor order, an applicant filing a request for the
declaration of a common processor also has the option of requesting that the ERCB direct
• the proportion of production to be processed by the common processor from each
producer or owner in the pool (Section 53(5)(a)), and/or
• the total amount of gas to be processed by the common processor from the pool subject to
the common processor declaration (Section 53(5)(b)).
If there is a dispute as to the tariff to be paid to the common processor, either the common
processor or an owner may also apply under Section 55(2) of the OGCA for the ERCB to set
the price.
An applicant may choose to file an application for the ERCB to set fees at the same time as it
files an application under Section 53. However, in most cases where the ERCB is prepared to
grant a common processor order, the application for the setting of tariffs may be deferred to
allow for additional negotiations.
Usually it would not be necessary for an applicant making a request under Section 53(1) for
the declaration of a common processor to also make requests under each of Sections 53(5)(a),
48(5)(b), 55(2), and 56, although each option is available if there is a dispute on each issue.
For example, an application for the declaration of a common processor under Section 53(1)
ERCB Directive 065: Resources Applications / Common Processor (October 2011) • 1-21